Summer is coming, and that means higher electric bills

March 15, 2012
Summer temperatures in Texas cause a huge increase in the amount of electrcity used within the state, which in turn drives the price higher.

Electricity prices are already moving higher as temperatures have begun to climb. Rates have held steady over the last 2 ½ years, but are now climbing higher. Prices for commercial electricity have reacted to a larger degree than residential rates, but that won't last for much longer.

Texas is very fortunate in that 40% of our electricity is generated from the burning of natural gas. The price of natural gas is quite a bit lower than that of coal, and the second largest known gas field in the US is located in the DFW area.

Electric rates hit a high during July of 2008, when it doubled during the second quarter of that year. By the end of that year, rates had crashed - dropping by over 50%. They continued their drop through the fall of 2009, and have stayed low until this past month. Rates are still down over 45% from the highs of 2008, but they have surged ahead this month, along with the price of oil and gasoline.

How high electric rates can go is anyone's guess, but experts are now expecting this surge to surpass the highs of 2008. Locking in a low electric rate today can help protect you from the expected rise in the price of electricity.